A Japanese-owned pharmaceutical company is to bring 500 jobs to Hertfordshire where a £100m European headquarters and manufacturing centre will be built.

Eisai starts construction this month at Hatfield with manufacturing and research operations beginning in 2008.

The £2.6bn-turnover company specialises in drugs for pain relief, stomach ulcers and degenerative conditions such as Alzheimer's Syndrome and epilepsy.

Eisai's president Haruo Naito said he was attracted by the UK's expertise.

"The UK has an excellent reputation for scientific innovation, especially in the area of life sciences," Mr Naito said.

The company, founded in 1936, already has laboratories at University College London carrying out research into neurodegenerative diseases.

It is also carrying out clinical trials for cancer treatments.

Health Minister Lord Hunt said: "One of the major strengths of having a successful research-based industry in the UK is that patients here can be the first to benefit through involvement in clinical trials, and then by early access to cost-effective innovative medicines.

"Eisai's decision to site its European Knowledge Centre in Hatfield shows the UK remains an attractive country for global companies to invest in."